Credit card companies have agreements under which the terms of credit are extended. Often such agreements state that any issue with respect to the agreement for credit will be governed by the law of a certain state, whatever state that may be.
A recent tact has been taken in some collection cases, alleging that attorneys who attempt to collect debts for certain credit card obligations should be governed by the law of the state named in the credit card agreement when filing suit to collect overdue balances. The scenario is that the state under which the agreement is to be construed has a shorter limitations period to collect on an overdue account than provided for under Ohio law, and therefore, the attempt to collect the debt under Ohio law, when such collection is not timely under the law of the state governing the credit agreement, violates the FDCPA (Fair Debt Collection Practices Act). Although it would appear that such collection actions brought under the jurisdiction of Ohio courts are subject to Ohio procedural law in bringing a
claim on an overdue account, this issue has yet to be fully resolved under Ohio or federal law governing the collection of debts.
Lawyers collecting debts for any creditor with a national or regional presence in particular should be aware of this potential pitfall if the creditor has provided the debtor with some form of agreement governing the credit provided governed by the law of a state other than Ohio.
The contents of this newsletter are provided for informational purposes only, and should not be construed as providing legal advice. Copyright 2011 Ohio Bar Liability Insurance Company